Understanding USAA’s Subscriber Savings Account

USAA is my favorite bank and the company with which my wife and I insure our home and autos. You can’t beat their customer service, and their insurance premiums are always some of the lowest you will ever find! I have been a happy USAA customer for about 7 or 8 years now, and I don’t think I will ever leave them.

That said, I’ve had discussions with some of their other members on other occasions and one thing there is always some misconception about the Subscriber Savings Account (SSA) that belongs to each USAA member with a property and casualty policy.

USAA recently sent out SSA notices to their account holders, so I decided to take this opportunity to explain what they are.

Subscriber Savings Accounts

Subscriber Savings Accounts (SSAs) are a byproduct of the legal structure of USAA. One of the interesting features about USAA is that it is not a publicly owned company, USAA is actually member owned. This is important because it gives USAA different options for raising capital.

Publicly owned companies sell stock to raise capital; USAA holds it capital in member owned SSAs. These funds are held in reserve for USAA to satisfy legal requirements and pay for catastrophic losses and other catastrophes.

It’s your money, but it is held by USAA. An SSA is your money, but it isn’t a bank account. The money held in in an SSA under each member’s name, and remains there in the event USAA needs to use the money to pay insurance settlements or claims. Members are not able to make withdrawals or deposits to or from their SSA.

SSA Balance. Money is allocated to your SSA depending on several factors, including a percentage of the particular member’s property and casualty premiums, USAA’s investment portfolio and performance, the member’s SSA balance (sometimes distributions are made on a percentage basis), longevity as a USAA member, and other factors.

SSA Distributions. USAA board members have the option to make financial distributions to its members based on how well USAA’s investments performed, how much money each person has in their SSA, and a multitude of other factors.

How to get your SSA money back. There is actually no way to get your SSA funds back unless you close all of your property and casualty policies. Your SSA will be paid out approximately 6 months later. When my wife and I consolidated our policies after we got married, I received the balance of my SSA after closing my account – about $160. The good news is that receiving your SSA funds is not generally taxable because it is considered a return on premiums. Be sure to check with a tax adviser for more details.

Distributions are not guaranteed. USAA has a track record of giving their members distributions, but it is important to note that these are not guaranteed. Still, it is nice to know that you can receive a return on your premiums if you ever leave the company. Most insurance companies end up keeping those funds!

USAA Membership: USAA membership is a privilege earned by those in uniform — and it’s a privilege that can be handed down to their children. Those eligible to join the association include:

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Ryan Guina is the founder and editor of The Military Wallet. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.
Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.
Ryan uses Personal Capital to track and manage his track his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

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Comments

I currently have my auto, home, and four townhomes insured by USAA and payments for all are taken from my USAA Visa Card. I wanted to set-up a separate account for my townhomes and be billed directly to my home address. USAA stated that they could not do that because all premiums are paid “together” and cannot be separated. One payment method only. I’ll let my attorney handle this discrimination.

Marc, I’m not a lawyer, but I don’t see how this is discrimination. Many financial organizations and companies limit customers to one personal account. You would need to check with USAA to see if that is the situation you are experiencing. USAA does not currently offer separate business accounts, so it’s possible everything would need to be run through your personal account if you are trying to separate things for business reasons (I’m not assuming this, it’s just not clear in your comment if this is the case).

As for setting up payments, it may depend on how your insurance policies are set up. For example, my auto, home, and life insurance separate policies are through USAA. They are all billed separately and the premiums come directly from my checking account when due.

This may have bearing for your the insurance policies on your home and four townhomes. If your policies are bundled, you may have to separate them to be able to change your billing process. Someone at USAA should be able to explain their policies on multiple homeowner’s insurance policies. I would start by reviewing the terms and conditions of the insurance policies and contacting USAA for a better understanding of their corporate policies. I’m sure they cover it somewhere in the fine print or can explain their policies over the phone. If not, then I’m sure your attorney will be able to find the information with a couple quick phone calls or letters.

As the article states, USAA is owned by members like us. Most every other company is a publicly shared company where people can buy stocks. Instead of doing that, USAA shares are distributed amongst us members. I suppose this is a benefit over giving a huge check to a small group of shareholders. I wonder if this is quasi profit sharing. That’s the best way to wrap my head around it. Every year, many members receive a dividend. I’ve always received somewhere between $100-200, but it’s varied on the amount of members, economy, disaster payouts, etc. I really can’t complain considering USAA has been good to me for 15 years or more. I never paid too much attention to it until now. I closed all my accounts because I wanted rider policies on my homeowner’s policy for a very old house, and USAA didn’t offer that. I really hated leaving because USAA was so predictable and fair with my accident. Well, it’s been about 6 months and I just received a refund for over 3k. I didn’t expect this money. I think I was thinking that the 3k was the overall payout over the years. Gotta say I’m pretty happy about this. I don’t know a single insurance company that is member owned and does distributions. On top of that, I liked their rates along with the coverage. BTW, I now have to pay to replace my windshield with Safeco. Never ever had to pay for a windshield with USAA :/ Oh well.

I’ve been with USAA for over 50 years and my SSA is quite substantial, but the company has changed drastically over the years, so I am preparing to close ALL of my accounts. I shouldn’t have to wait a full 6 months after to get MY money, but this is one of many reasons I’m done with USAA. The latest – claims on my homeowners that are not my fault nevertheless result in an increase in my premiums. And for one of those claims, the burden of proof was on me to prove a preferred USAA vendor caused more problems than they came to fix. And that’s after two USAA investigations proved the vendor ******* up. This is no longer a company that looks out for its member/owners.

This is a good observation. This is something many people would want to know if they are a stockholder of a public company or a member in a member-owned company. (USAA’s legal structure is that of an inter-insurance exchange, which is somewhat unique – of course, if you are a member, you may want to know how executives are compensated).

While I agree that $4M is a lot of money, it is less than many bank executives earn. Some of the highest compensated banking executives earn close to $30M annually when accounting for total compensation (pay, stock grants, etc.). So it’s important to view this in the perspective of what it takes to become a CEO in the banking and/or insurance field, average compensation for those executives, and where the USAA executives fit in that equation. I’m not an expert in the banking field, so I can’t tell you whether that is above or below average, or simply average, based on company size, revenue, profits, etc. Please feel free to share this information if you are an expert in the field or have done the research comparing executive pay in the banking or insurance industries.

I have a very simple question that hopefully someone could answer for me. I would love to know if they automatically enroll each individual into their SS whenever they initially join, or if you have to request to be enrolled. My boss recently switched services from USAA to another carrier and they allowed him to “cash out” his. He advised me that I needed to do the same since I am no longer with USAA either. I was with them for a short period of 5 or 6 years so I don’t know if I am even eligible. I called to see and the young lady I spoke with wasn’t very informed. I asked her the same question and she stated that I was with USAA but I was not a member. I asked her to explain and she couldn’t. She then stated that I was not the primary for my account in order to access the SS. I informed her that the entirety of my time with USAA I was the only person on the policy which is completely mine. After several holds, she told me that I needed to be a member for at least 30+ years to access my SS. This didn’t sound right, but I was at work and didn’t have anymore time to discuss/argue. Could someone please help me out? I was a member with a full coverage insurance policy for 5 or 6 years. I just want to have my ducks in a row for when I call back. Thanks in advance!

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